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Chapter History S1-F1-C2, Disability Tax Credit

Introduction

The purpose of a Chapter History page is to highlight any amendments to the information contained in a chapter of an income tax folio, including amendments to the information originally contained in an interpretation bulletin that has been cancelled and replaced with a folio chapter. It outlines amendments that have been made as a result of legislative changes and proposed legislative changes, precedential court decisions, as well as new or revised interpretations of the Canada Revenue Agency (CRA).

Except as otherwise noted, all statutory references herein are references to provisions of the Income Tax Act, R.S.C., 1985, c.1 (5th Supp.), as amended and all references to a Regulation are to the Income Tax Regulations, C.R.C., c. 945, as amended.

Updated February 8, 2024

¶2.9 has been updated and new ¶2.9.1 has been added, to reflect a legislative amendment to subparagraphs 118.4(1)(c.1)(i) to (iii) and the addition of new subparagraphs 118.4(1)(c.1)(iv) to (x), made by S.C. 2022 (formerly Bill C-19), c.10, s.7(1). These legislative amendments are applicable to the 2021 and subsequent tax years in respect of certificates described in paragraph 118.3(1)(a.2) or (a.3) that are filed with the Minister after June 23, 2022. These amendments expanded the non-exhaustive list of functions to be included as part of the mental functions necessary for everyday life. This expansion is intended to ensure that the eligibility criteria for the disability tax credit better articulate the range of functions necessary for everyday life.

Also, beginning in ¶2.9 and throughout the Chapter, references to “form T2201” or “form” have been updated to “T2201 Certificate” or “certificate” for clarity, as applicable.

¶2.9.2 has been added to reflect a clarification in the Finance Consolidated Explanatory Notes of June 2022 regarding subsection 118.4(1), in that goal setting (which is listed as part of the mental functions necessary for daily life) is intended to capture short-term, daily goals rather than longer term life planning.

¶2.14 has been updated and new ¶2.14.1 has been added, to reflect a legislative amendment to subparagraph 118.‍3(1)‍(a.‍1)‍(ii), made by S.C. 2022 (formerly Bill C-19), c.10, s.6(1), applicable to the 2021 and subsequent tax years in respect of certificates described in paragraph 118.3(1)(a.2) or (a.3) of the Act that are filed with the Minister after June 23, 2022.  A similar update has been made to the preambles of ¶2.15 and new ¶2.15.1 to reflect an amendment to subsection 118.3(1.1) (consequential to the amendment to paragraph 118.3(1)(a.1)), made by S.C. 2022, c.10, s.6(2), applicable to the same years mentioned above.

¶2.15 has been updated and new ¶2.15.1 has been added, to reflect a legislative amendment to paragraphs 118.‍3(1.‍1)‍(b) to (d), made by S.C. 2022 (formerly Bill C-19), c.10, s.6(3), applicable to the 2021 and subsequent tax years in respect of certificates described in paragraph 118.3(1)(a.2) or (a.3) that are filed with the Minister after June 23, 2022.

Notably, ¶2.15.1(d) reflects new subparagraph 118.3(1.1)(c)(i), which allows time spent by another person who performs or supervises activities relating to the administration of therapy for a child, to be counted toward the 14-hour requirement. Previously, only the time spent by the child’s primary caregivers could be counted. Also, ¶2.15.1(f) reflects the amendments to paragraph 118.3(1.1)(d), which provides a list of exclusions for time spent on certain activities that are not counted as time spent on administering therapy.

¶2.15.2 has been added to reflect the position that being required to consume a particular meal replacement product would be more akin to a dietary restriction or regime and would not be considered therapy as contemplated by paragraph 118.3(1)(a.1), except in the case of therapies that are described in new paragraph 118.3(1.1)(b).

¶2.15.3 has been added to reflect new subsection 118.3(1.2), which was added by S.C. 2022 (formerly Bill C-19), c.10, s.6(3.1), applicable to the 2021 and subsequent tax years in respect of T2201 Disability Tax Credit Certificates that are filed with the Minister after June 23, 2022.

¶2.16 has been updated to add the phrase “or diagnosed with type 1 diabetes mellitus” after the term “blind,” to reflect the deeming provision for type 1 diabetes.

¶2.30 and ¶2.31 have been updated to clarify the meaning of the term supporting individual.

Also, ¶2.30 has been expanded to refer readers to relevant terminology in Income Tax Folio S1-F4-C2, Basic Personal and Dependant Tax Credits, given that eligibility for the transfer of the disability tax credit from a dependant relies in some ways on eligibility for the tax credits under paragraphs (b) and (d) of the description of B in subsection 118(1).  

Further, ¶2.31 has been updated to add the phrase “such as” to clarify that necessities of life are not limited to food, shelter, and clothing.

Finally, editorial changes have been made to ¶2.31 to facilitate comprehension and to more clearly differentiate between the parties referred to. The first two sentences of ¶2.31 originally contained references to “particular individual”, “person”, and “someone”, which terminology may have been confusing. Specifically, these two sentences formerly read: “In each case, it is a question of fact, whether the actions or contributions of a particular individual are of such a nature and degree that they could be said to constitute support of another person. Although consideration should be given to the availability and quantum of support provided, a person is generally considered to be dependent on someone if the individual has actually supplied necessary maintenance...”

¶2.31.1 has been added to provide guidelines on whether dependency can be said to exist between an individual and an eligible person with a disability. The additional information is based on the decision in Calek v R., [2002] 2 C.T.C. 2857, confirmed by Calek v R., 2003 FCA 20. Although that decision was in the context of the medical expense tax credit, its relevance stems from the fact that it ruled on the question of dependency, as contemplated under subsection 118(6). 

¶2.31.2 has been added to include content that was previously in ¶2.31.

¶2.31.3 has been added to clarify the meaning of the term non-financial support. As such, ¶2.31.4 has been added to clarify that other forms of support (such as moral support) are not contemplated for the purpose of transferring the disability tax credit (which is also the case for other tax credits under subsection 118(1)).

¶2.31.5 has been added to clarify that contributions toward the basic necessities of life for the benefit of an eligible person with a disability do not automatically establish eligibility for the transfer of the disability tax credit,.

¶2.49 has been added to provide information regarding requests by the Minister of National Revenue for more information in relation to claims for the transfer of the disability tax credit to a supporting individual.

¶2.50 has been added below a new heading, “Interaction with other tax credits,” to reflect a legislative amendment that added section 122.92, made by S.C. 2022, c.19, s.19 (formerly Bill C‑32), applicable to the 2023 and subsequent tax years, in relation to the new multigenerational home renovation tax credit.

¶2.51 has been added to reflect the existing home accessibility tax credit under section 118.041 which was added by 2015, c. 36 (formerly Bill C‑59), applicable to the 2016 and subsequent tax years.

The Reference section has been updated to add sections 118.041 and 122.92. 

Updated October 9, 2020

Throughout the Chapter, references to the CRA website have been changed to the Government of Canada website.

¶2.13 has been reworded for clarity, with the reference to “an average person” being eliminated.

¶2.20 and ¶2.21 have been updated to reflect a legislative amendment to paragraphs 118.3(1)(a.2) and (a.3), made by S.C. 2017 (formerly Bill C-44), c.20, s.16(1) and (2), in respect of certifications made after March 21, 2017. The amendment added nurse practitioners to the list of medical practitioners who can certify severe and prolonged impairments in physical or mental functions.

¶2.32 and ¶2.34 have been revised to reflect the legislative amendment to clause 118.3(2)(a)(i)(B), made by S.C. 2017 (formerly Bill C-44), c.20, s.16(3), applicable to the 2017 and subsequent tax years. The amendment is consequential to the repeal of paragraph (c.1) of the description of B in subsection 118(1) (eliminating the in-home care of relative tax credit) and the amendment to paragraph (d) of the description of B in subsection 118(1) (introducing the Canada caregiver credit), made by S.C. 2017, c.20, s.12(4), applicable to the 2017 and subsequent tax years.

¶2.35.1 and ¶2.35.2 have been added to clarify the instances where an unused portion of the disability tax credit transferred from an eligible person with a disability may be split between supporting individuals.

¶2.35.3 has been added to clarify that the requirement to pay child support in respect of a child who is an eligible person with a disability may impact a supporting individual’s eligibility to claim the unused portion of the disability tax credit transferred from that person.

¶2.37 and ¶2.38 have been revised to reflect legislative amendments to:

In addition, minor revisions have been made to the French version of the Chapter for readability and consistency purposes.

Updated July 20, 2016

¶2.41 has been revised to delete the word “original” with respect to submitting a certified copy of Form T2201. This deletion is to reflect that taxpayers and representatives can now submit the form as an electronic document through My Account and Represent a Client, respectively. Additionally, the word “eligible” in the phrase “eligible person with a disability or their legal representative” has been removed so that it does not appear that an individual will be eligible for the disability tax credit before their Form T2201 is reviewed, and their application approved by the CRA.

Updated June 21, 2016

¶2.26 and 2.27 have been revised to link readers to the indexation chart on the CRA webpage to see the amounts referred to.

¶2.28 has been revised to link readers to the indexation chart on the CRA webpage to see the amounts referred to and to remove references to specific tax years so that the information is more broad-based.

Updated February 24, 2016

¶2.37 and 2.38 have been updated to reflect a legislative amendment to repeal section 118.03 (non-refundable children’s fitness tax credit), made by S.C. 2014, c.39, s.32 (formerly Bill C-43), effective for the 2015 and subsequent tax years.

¶2.38 has been updated to reflect a legislative amendment to paragraph 118(1)(b.1) (formerly known as the child tax credit) amended by S.C. 2015, c.36, s.30(1), applicable to the 2015 and subsequent tax years.

¶2.42 has been updated to remove the sentence stating that individuals are required to file their income tax and benefit return in paper form when they have to submit Form T2201, Disability Tax Credit Certificate, to the CRA for that tax year. This is to reflect that individuals can now file their return online regardless of whether their Form T2201 has been submitted to the CRA for that tax year.

Updated January 20, 2016

The Summary and Reference sections of this Chapter are revised to refer readers to Guide RC4064, Disability-Related Information. Previously, readers were referred to Guide RC4064, Medical and Disability-Related Information. This guide was cancelled and replaced on January 5, 2016 with Guide RC4064, Disability-Related Information and Guide RC4065, Medical Expenses.

¶2.19 is revised to delete content advising readers that, “In Form T2201 and Guide RC4064, the medical practitioners who may certify for purposes of the disability tax credit are referred to as qualified practitioners”. In the French version of the Chapter, the last sentence of ¶2.19 is kept but modified to replace the expression “praticiens qualifiés” with “professionnels de la santé.” These revisions coincide with amendments to Form T2201 as well as Guides RC4064 and RC4065 which no longer use the term “qualified practitioners” to refer to the medical practitioners who may certify for purposes of the disability tax credit.

Updated November 24, 2015

Minor changes have been made to improve the usability of the income tax folios:

Updated September 12, 2014

¶2.2(c) is revised to clarify that a medical practitioner must certify that the individual meets the requirements under both paragraph (a) and (b).

¶2.27 and 2.28 are revised to reflect indexed amounts for 2014.

¶2.37 has been updated to reflect a legislative amendment to paragraph 118.3(2)(d) which now incorporates section 118.07, made by S.C. 2014, c.20 (formerly Bill C-31), effective for the 2014 and subsequent tax years.

¶2.38 has been updated at the description of variable C to reflect a legislative amendment to section 118.8 which now incorporates section 118.07, made by S.C. 2014, c.20, effective for the 2014 and subsequent tax years.

Updated October 2, 2013

Throughout the French version of the Chapter and its Chapter History, general revisions have been made to improve readability. The following changes have also been made to the Chapter.

¶2.37 and ¶2.38 are revised to reflect a legislative amendment to section 118.7, made by S.C. 2013, c.34 (formerly Bill C-48), s. 253(1), effective for the 2006 and subsequent tax years. The amendment is as a result of the introduction of the new Quebec Parental Insurance Plan on January 1, 2006.

¶2.48 is revised to reflect a legislative amendment to paragraph 118.3(4)(b), made by S.C. 2013, c.34 (formerly Bill C-48), s. 250(2), effective for the 2005 and subsequent tax years. The amendment results from the addition of paragraph 118.3(1)(a.3) to the Act in 2005, and adds a reference to the medical practitioners referred to in the latter paragraph.

Updated March 28, 2013

General

Income Tax Folio S1-F1-C2, Disability Tax Credit, together with Income Tax Folio S1-F1-C1, Medical Expense Tax Credit and Income Tax Folio S1-F1-C3, Disability Supports Deduction, consolidate, replace and cancel Interpretation Bulletin IT–519R2, Medical Expense and Disability Tax Credits and Attendant Care Expense Deduction.

In addition to consolidating the content of the former interpretation bulletins, general revisions have been made to improve readability. Any substantive technical and interpretive changes to the information outlined in the former interpretation bulletins are described below.

Legislative and other changes

The discussion of the disability tax credit was formerly found in ¶1 and ¶4 to 9 of Interpretation Bulletin IT–519R2. The discussion is now found in this stand-alone Chapter.

Throughout the Chapter, all references to spouse have been changed to spouse and common-law partner based on the 2000 same-sex partner bill.

¶2.1 is added to define the term eligible person with a disability for purposes of the Chapter.

¶2.2 (formerly included in the discussion at ¶5 of IT–519R2) is revised to reflect a legislative amendment made by S.C. 2001, c. 17, s. 96, effective for the 2000 and subsequent tax years, which amended subsection 118.3(1) to extend the eligibility for the disability tax credit to persons who would be markedly restricted in the ability to perform a basic activity of daily living, but for life-sustaining therapy.

¶2.2(b)(ii), ¶2.7, and ¶2.21 are added to reflect a legislative amendment made by S.C. 2006, c. 4, s. 63(2) which amended paragraph 118.3(1)(a.1), effective for the 2005 and subsequent tax years, to extend the eligibility for the disability tax credit to persons who meet an equivalent to markedly restricted requirement.

¶2.4 (formerly included in the discussion at ¶1 of IT–5192) is expanded to clarify the time that the expectation test is applied.

¶2.8 (formerly included in the discussion at ¶1(c) of IT–519R2) is revised to reflect a legislative amendment to subparagraph 118.4(1)(c)(ii) made by S.C. 2003, c. 15, s. 75(1), effective for the 2003 and subsequent tax years and a legislative amendment to subparagraph 118.4(1)(c)(i) made by S.C. 2006, c. 4, s.64(2), effective for the 2005 and subsequent tax years.

¶2.9 is added to reflect a legislative amendment made by S.C. 2006, c. 4, s. 64(3) which added paragraph 118.4(1)(c.1) to the Act, effective for the 2005 and subsequent tax years.

¶2.10 and ¶2.11 are added to reflect legislative amendment made by S.C. 2003, c. 15, s. 75(2), which added paragraphs 118.4(1)(e) and (f) to the Act, effective for the 2003 and subsequent tax years.

¶2.14 is added to reflect a legislative amendment made by S.C 2001, c. 17, s. 96(2), which added the concept of life sustaining therapy to paragraph 118.3(1)(a.1) of the Act, effective for the 2000 and subsequent tax years.

¶2.15 is added to reflect a legislative amendment made by S.C. 2006, c. 4, s. 63(4), which added subsection 118.3(1.1) to the Act, effective for the 2005 and subsequent tax years.

¶2.16 (formerly included in the discussion at ¶1 of IT–519R2) is revised to clarify that, it is the impact of a person’s impairment in mental or physical functions on their ability to perform basic activities of daily living that is relevant to the determination of whether they are an eligible person with a disability. The particular medical condition that a person has, except where the person is blind, is not determinative of whether the person is an eligible person with a disability.

¶2.19 (formerly included in the discussion at ¶3 and ¶5 of IT–519R2) is expanded to reflect a legislative amendment made by S.C. 2006, c. 4, s. 63(3), which amended paragraph 118.3(1)(a.2) and added paragraph 118.3(1)(a.3), effective for the 2005 and subsequent tax years.

¶2.20 (formerly included in the discussion at ¶5 of IT–519R2) is expanded to reflect a legislative amendment made by S.C. 2006, c. 4, s. 63(3), effective for the 2005 and subsequent tax years, which expanded the list of medical practitioners, in addition to medical doctors, who could certify that a person met the markedly restricted requirements in certain circumstances.

¶2.21 is added to reflect the legislative amendment made by S.C. 2006, c. 4, s. 63(3), which added paragraph 118.3(1)(a.3), effective for the 2005 and subsequent tax years.

¶2.22 is added to clarify the circumstances when a disability tax credit may be permitted where the Form T2201, Disability Tax Credit Certificate, is being completed after the death of the person with the disability.

¶2.23 is added to refer medical professionals to the CRA Web site for additional information to assist them in completing the Form T2201.

¶2.24 (formerly included in the discussion at ¶6 of IT–519R2) is revised to improve clarity and to refer readers to the discussion of paragraph 118.3(1)(c) in Income Tax Folio S1-F1-C1.

¶2.25 to 2.28 (formerly included in the discussion at ¶4 of IT–519R2) is expanded to discuss a legislative amendment made by S. C. 2001, c. 17, s. 96(6), effective for the 2000 and subsequent tax years. This amendment added component C to the formula after paragraph (c) of subsection 118.3(1).

¶2.29 is added to clarify the circumstances in which a person with a disability may be able to transfer all or part of the disability tax credit to another taxpayer.

¶2.30 (formerly included in the discussion at ¶7 of IT–519R2) is revised to clarify that a supporting individual for purposes of the disability tax credit, does not include the spouse or common–law partner of the person with a disability.

¶2.31 is added to provide the CRA’s views on determining whether any particular person is a supporting individual with respect to the person with a disability.

¶2.32 and ¶2.33 (formerly included in the discussion at ¶7(a) and (b) of IT–519R2) are updated to reflect a legislative amendment to paragraph 118.3(2)(a) made by S.C. 1999, c. 22, s. 35(2), applicable to the 1998 and subsequent taxation years which added a reference to the in-home care of relative tax credit. The paragraphs are also updated to reflect a legislative amendment made by S.C. 2001, c. 17, s. 96(7), effective for the 2000 and subsequent tax years, which amended paragraph 118.3(2)(a) to extend the transferability of the disability tax credit to certain other relatives of the person with a disability who may claim the caregiver credit or the infirm dependant credit in respect of the person with a disability.

¶2.34 (formerly included in the discussion at ¶7 of IT–519R2) is revised to refer readers to information on the CRA Web site regarding the credits discussed at ¶2.32.

¶2.36 (formerly included in the discussion at ¶8 of IT–519R2) is revised to clarify the rules regarding a claim of a transfer of the disability tax credit by a supporting individual in circumstances where there is a spouse or common–law partner of the person with a disability.

¶2.37 (formerly included in the discussion at ¶8 of IT–519R2) is revised to reflect legislative amendments to subsection 118.3(2), made by S.C. 2009, c. 31, s. 5(2), effective for the 2009 and subsequent taxation years and by S.C. 2011, c. 24, s. 28(1), effective for the 2011 and subsequent taxation years. The amendments expand the list of excluded tax credits for purposes of calculating the amount that may be transferred to a supporting individual.

¶2.38 to 2.40 (formerly ¶9 of IT–519R2) are revised to reflect legislative amendments to paragraph 118.8, made by S.C. 1997, c. 25, s. 29(1), applicable for the 1997 and subsequent tax years; S.C. 1998, c. 19, s. 29(1) and s. 29(2), applicable for the 1997 and subsequent tax years; S.C. 1999, c. 22, s. 39(1), effective for the 1998 and subsequent tax years; S.C. 2000, c. 19, s. 26(1), effective for the 2000 and subsequent tax years; S.C. 2000, c. 12, Sched. 2, s. 7(g) and s. 1(z.8), effective January 1, 2001; S.C. 2000, c. 12, s. 133, effective January 1, 2001; S.C. 2007, c. 2, s. 25(2), effective for the 2005 and subsequent tax years; S.C. 2007, c. 2, s. 25(1), effective for the 2006 and subsequent tax years; S.C. 2007, c. 29, s. 10(1), effective for the 2007 and subsequent tax years; S.C. 2009, c. 31, s. 7(1) and s. 7(2), effective for the 2009 and subsequent tax years; and S.C 2011, c. 24, s. 32(1) and s. 32(2), effective for the 2011 and subsequent tax years. The discussion has also been revised to refer readers to the CRA Web site discussion of the meaning of the terms spouse and common-law partner.

¶2.41 to 2.44 (formerly included in the discussion at ¶5 of IT–519R2) are expanded to enhance the information regarding the completion and filing of Form T2201.

¶2.45 is added to clarify that although the filing of a completed Form T2201 is a requirement to be able to claim the disability tax credit, the submission of a completed Form T2201 is not a guarantee that the claim for the disability tax credit will be allowed.

¶2.46 is added to clarify the filing requirements where a supporting individual is claiming a disability tax credit in respect of a person with a disability who has no taxes payable for the year.

¶2.47 and ¶2.48 are added to provide information regarding requests by the Minister of National Revenue for more information regarding a taxpayer’s claim for the disability tax credit.

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